Budget Deficit and Trade Deficit are Linked

As the battle over the Washington’s budget deficit heats up again, it is timely to point out that even a partial solution to the trade deficit would be a huge source of government revenue without raising taxes.

Presently, the billions of dollars that leave our economy daily mean not only fewer jobs at USA factories and their suppliers, but also much less tax revenue collected at every level of government.

For example, if a factory that employs 10,000 Americans moves to Asia, we’re not just putting Americans out of work. We’re also losing all the taxes those employees would have paid, those the workers at their suppliers would have paid, and so on. That web of economic activity not only disappears, but so do the tax revenues that would have been collected!

Thus, the more that is Made in USA, the more tax revenue the government collects. Indeed, the correlation between the rise of the budget deficit (excluding Social Security transfers) and the trade deficit since 1970 is very tight.

We not only vote USA when we purchase Made in USA, we add tax revenue to the government without raising taxes!

 

Todd Lipscomb is the founder of MadeinUSAForever.com, your source for products Made in the USA.